As most people are aware, the recession is taking its toll not just on individuals and families, but on cities and counties across the U.S. Jefferson County filed the largest municipal bankruptcy in U.S. history last year. The county has recently cut back on services as officials expect to run out of reserves by October. Cuts have taken place that affect services at its hospital for the poor, the roads department is no longer picking up road kill, and the county has skipped a debt payment to preserve cash.
A lawsuit has been filed on behalf of 130,000 Jefferson County sewer system customers. The filing claims that rate payers of the sewer system have paid $1.6 billion unnecessarily because of Wall Street financing techniques and the corruption of more than 20 county office holders. The suit follows a November 9 municipal bankruptcy filing, a result of close to $3 billion of sewer system debt.
The three most common forms of debt are mortgages, student loans, and credit card debt, in that order. In the past, it's been fairly easy for people in Alabama and other states across the U.S. to obtain mortgages even if it was unlikely that they would be able to make payments. Just about anyone could get a credit card, and it was even easier to obtain a student loan. The result of these frivolous, and sometimes deceptive lending practices, has been loads of debt.
When using the internet it's not uncommon to come across advertising that seems too good to be true. Claims that a product will make an individual thin in five days, make an aspiring entrepreneur rich in six months, or eliminate a consumer's debt in an unrealistic amount of time are hard to believe. However, when desperation sinks in many people are apt to believe just about anything. When consumers are saddled with debt, a too-good-to-be-true option gives a sense of hope that maybe there is an easier way out.
For individuals in Alabama who are unable to keep up on car loan payments, bankruptcy may be an option. Once a person files bankruptcy an "automatic stay" will go into effect stopping all collection efforts, including vehicle repossession. Although those efforts may start up again, causing an individual to lose their vehicle, it gives consumers the time to make decisions that are best for them.